The index has further gone into oversold territory but the bulls lack strength, said analysts.
Nifty50 gave up around 300 points from the intraday high of 16,083, which hints at a lack of conviction on the part of bulls about the sustainability of upmove at higher levels, said Mazhar Mohammad of Chartviewindia.in.
“The only positive thing remains the fact that the advance-decline ratio almost remained decisively in favor of the bulls, who were able to safeguard the intraday low of Thursday’s session present at 15,735 levels. It remains critical for the index to sustain the said low as the breach of this can eventually drag down the index towards 15,400 level,” he said.
For the day, the index closed at 15,782.15, down 25.85 points or 0.16 per cent.
Nagaraj Shetti, Technical Research Analyst,
Securities said Nifty50 is nearing a crucial lower support of previous swing low at 15,670 hit on March 8. The index is expected to break below this swing low to form a new lower bottom of the sequence, he said.
“There is a possibility of further weakness from here. The presence of crucial support as per monthly timeframe and the overall weekly chart pattern indicate a chance of important bottom reversal around 15,500-15,400 levels. The confirmation of the reversal pattern on the daily chart could only open a sustainable upside bounce in the market,” he said.
Amol Athawale of Kotak Securities said after a long time, Nifty50 has closed below the 16,000 mark on a weekly basis, which is broadly negative. For traders, he said, 15,900 would act as a key resistance level, below which the index could slip till 15,650.
“The 15,900 level would be the immediate trend reversal level for the bulls and above which we could see a strong pullback rally up to 16,100-16,300,” he said.
Nifty Bank Outlook
Shivangi Sarda of
Securities said Nifty Bank opened 400 points higher and kept consolidating. It fell in the last hour of the day and formed a Bearish candle on a daily frame.
“In the weekly frame also , it formed a Bearish candle. The index has been making lower highs for the last five weeks. Till it holds below 33,333, we may see weakness towards 32,750 and 32 500 levels. Hurdles have shifted lower to 33,500 and 34,000 zones.